Final tobacco buyout payment comes a bit later for NC farmers
02/04/2014 1:27 PM
02/04/2014 1:28 PM
North Carolina tobacco farmers are having to wait a little longer than usual to receive their final payment from the Tobacco Transition Payment Program.
Since the tobacco buyout payments began in 2005, farmers have typically received their annual payment in mid-January. This year, however, the farmers won’t receive their first payment until later this month.
“Basically what’s going to happen, is sometime in February the farmers should receive approximately 95 percent of the payment that they would be normally receiving,” said Jay Boyette, commodity director for the N.C. Farm Bureau. “And in the fourth quarter of the year, they’re going to receive a final payment that makes up the final 5 percent.”
Boyette said the delay was caused by the uncertainty over whether the buyout would be subject to the across-the-board government cuts known as sequestration.
The Obama administration in November announced that the buyout trust fund would be subject to the cuts. But the administration reversed that decision in January after a number of officials, including most of North Carolina’s congressional delegation, protested the cuts.
Payments under the program are from about $10 billion assessed on tobacco product makers and importers. The payments were started under a 2004 law that ended Depression-era tobacco quotas and were to be made annually for 10 years. This year is the last year for the payments.
Many farmers have come to count on the annual payments to cover various expenses. Boyette said most farmers will end up experiencing about a month delay.
“It’s certainly not devastating, but it certainly impacts your cash flow and how you might make payments on things,” Boyette said.
Staff writer David Bracken
Join the Discussion
News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.